Foreign Firms and Individuals
While many of our clients are “US persons” or businesses, we also Help Foreign Firms And Individuals with their US tax compliance. We sometimes will be a clients complete tax team – other times we assist their current tax and financial teams better deal with IRS issue they are not familiar with.
From Private Letter Rulings, Penalty Abatement and Appeals, Audits, Audit Reconsiderations, Tax Settlements, Offer in Compromise, and foreign penalties we handle any individual tax issue or any issue a small- or medium-sized business business. Whether in the US or elsewhere.
We have many fellow attorneys as clients as well as doctors and engineers.
Here is a Sample Representative Cases
Small Compliance Inquiry Reveals Huge Problem
Jorge was a Colombian citizen who owed property in the US through an LLC. He read recently that an IRS Form 5472 is required to be filed each year. We helped him file this form, but in our discussions Jorge told us he was also holding a large portfolio of US stock which he properly reported and paid on an IRS form 1040-NR.
Yet, Jorge had a huge potential problem. No one told him that there was a total separate estate tax on foreign owned-property. One with much worse rate and exceptions that the estate tax that applies to “US persons.” We told him how much less his children would inherit under his current structure and he immediately asked us is we could find a way to fix this.
We said we could. We restructured his business so that he no longer directly owned the US stock — taking that and his real estate out of harms way of the foreign-owned property estate tax.
An Awful Audit Leads to A Huge Tax Bill
Dom owned a very large construction business in Connecticut. He used the same CPA from the day he started business with nothing in his pocket and now that he had 40 employees, a mansion and accompanying headaches.
He received an audit notice in the mail and his CPA, who he trusted handled it. But the communication was poor and then ext thing he knew he ad a tax bill of $1.5 million dollars. His CPA said he lost on the issue of losses he was trying to apply.
But his losses were legitimate. He couldn’t figure out what happened .And for him, he actually had the ability to pay the $1.5 million, but that was a severe haircut and was hard to accept. So he reached out to us to see if we could help.
We discovered that his CPA basically rolled over on the audit and didn’t contest the IRS’s denial of his tax loss. So we filed for an audit reconsideration and the IRS accepted most of his losses, but not all. But Dom was still very happy – as the tax bill was something he could easily pay off over the next few years, and he didn’t lose his business or his assets.
Dom was not only very happy with out result, but so too were his children who were taking over his business for him.
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International Resolution Leads To Expatriation
Jake was a YouTube entrepreneur in Europe. One day, he received a letter form his bank. It was in regard to something call “FATCA.” So he looked it up and was floored to find out that he and his company he owed were subject to US taxation and worse, looking at the penalty exposure he had, he felt he wold be financially ruined and perhaps be sent to prison.
He hired a law firm in Maryland. They gave him a doom and gloom outlook but didn’t respond to his need for answers. So he started looking on YouTube. He found our Form 5471 series and started watching it. He then called his law firm and discovered that he knew more about these issues than they did. So he fired them. But realizing that he still needed help – there was too much he knew he still didn’t understand – so he decided to hire the firm because in his words “ “you gave me clarity before I was a client.”
We took a look at his situation and informed he was not at all at risk for criminal prosecution. And in fact, we told him he made a mistake that many many American entrepreneurs around the world make. And that the IRS had a program for him that would let him get into compliance, pay any taxes he owed and avoid civil penalties.
We entered him into the Streamlined compliance program – for he and his companies that were doing pretty well. And because he paid high taxes in Europe, he got a tax credit he could apply to his US taxes, and had a very modest tax bill to pay with the IRS.
However we weren’t done. Ryan was concerned about his current compliance year after year. And we told him, yes, his tax preparation bill year after year would be high – he had a lot of intricate foreign reporting. And eventually, he had to worry about the exit tax – his businesses were poised for huge valuation increases. So we discussed the issue of expatriation. He realized he didn’t identify as an American anymore and was holding on to his US citizenship based on fear. But that fear was costing him a lot of money and anxiety.
So we then helped him expatriate – we certified 5 years of compliance along with his expatriation form, Both our streamlined submission and expirations were processed without a hitch, so Jake was able to escape the US taxation fairly unscathed. Our results was the polar opposite of what his worst fear were.
However, Ryan has not completely escape US taxation. As much of his revenue is derived from the US, where it is subject to taxation, even though he is no longer a US person, he is still a client, although his US tax needs have changed.
Hedge Fund Manager Can’t Put a Dent in His Tax Bill
Charlies, a very successful hedge fund manager in Santa Monica, CA, got stuck with a tax bill after his ex-wife stole from him. He was incredibly embarrassed by this. He got hit wit ha $2 million bill. And like many of our clients, he actually had the ability on paper at least to pay.
So he tried his best to keep up with his installment agreement.
His “conservative” CPA was making him pre-lose year after year. Each year he had a $600,000 tax bill yearly and yet needed to pay the IRS about $400,000 per year to eventually wipe put the debt. He simply didn’t have enough to go around. The debt was increasing even though he was doing his best to pay it down. And worse, this debt was hurting his business reputation making it harder for him repay his taxes.
So he came to us looking for a solution. We concluded very simply “Charlie, you pay too much in taxes, it’s that simple. So we looked for some tax strategies and savings to amend his last three years to find a few hundreds thousands dollars. But as we were researching his case, we found that he actually had a theft loss to claim on the years he had balances. Theft losses so large they would wipe out his $2.2 million debt and actually would result in a little bit of a refund.
So we filed amended returns properly claiming the losses, The returns were accepted and process. The debt that seemed insurmountable wound up being resolved by a but of hustle and 30-page packet.
With this suffocating debt gone, Charlie is now able to grow his fund and invest in projects that he’s been wanting to, and he no longer worries about a client finding out about his embarrassing tax debt.